On Facebook, Twitter, influence can become profit

Companies are beginning to harness social media's new ROI – return on influence – by making it personal on their Facebook, Twitter sites.

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    Taylor Swift performs during the CMA Fan Fest in Nashville, Tenn., this summer. The country-pop superstar uses her Facebook page to naturally integrate Cover Girl with a personal testimonial and professional how-to video. It's a social-media example of personal influence to push a company.
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Musicians Taylor Swift and Kanye West have millions of Facebook fans and Twitter followers. But there's a difference between their abilities to get people to buy something or believe in something, just as there's a difference between JetBlue's social media strategy versus that of US Airways.

I call it the new ROI – return on influence. And the new ROI can affect the old ROI – return on investment – so directly that, increasingly, companies are starting to pay attention.

I've worked with companies from DoubleTree by Hilton to Nike to enhance their brands via social media. This same approach works for people, too. Three years ago, I developed "Random Acts of Shaqness." These were social media stunts designed to help basketball great Shaquille O'Neal bridge the virtual and physical worlds to connect with his fans. Shaq used social media to share his exact physical location with fans. The first fan who could find and tag him was rewarded with tickets to a game or an autographed jersey.

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Ultimately, this kind of influence is power. And in the world of marketing, it can be amazingly profitable. Two brands may have competing products that offer the same value and whose ads reach the same size audience, yet one is "cool," with soaring sales, while the other is bland and sales stay flat.

In the old days of marketing, circa 2003, it was difficult to measure this influence. Now, with social media, we can measure it more accurately than ever before. What that means for consumers is that, increasingly, companies are going to try to engage you not just on the "cold" metrics of ad impressions but also on the "warm" metrics of engagement and sentiment.

I call these the warm metrics because they're based more on emotion and affinity. With social media, we can see how many consumers responded, commented, "liked," viewed, retweeted, subscribed, and therefore engaged with a brand. The higher the level of engagement, the more likely a consumer will convert to action.

The old metrics of ad reach and frequency of impressions are still important. Coupled with the warm metrics, they can determine a brand's level of influence.

The next step is to turn that influence into profits. Online activity is trackable and therefore accountable down to each transaction level, unlike outdoor and TV advertising. For example, mar-keters can track online behavior from a social channel all the way through to purchase.

By dividing the total revenue generated via social efforts by the number of social media fans and followers, marketers can calculate the value of each fan and follower.

The more marketers latch on to these ideas, the more advertising will change. Here's one change to look for: Social networking revolves around people interacting with people, not logos. Companies will put more emphasis on the people behind their brands. In the world of the new ROI, they're the ones with the influence.

This all brings us back to Taylor and Kanye. Currently Kanye touts the success of a friend and fellow rapper via his social channels. By contrast, Taylor shares photos from her appearance on "Ellen" and naturally integrates Cover Girl on her Facebook page with a personal testimonial and professional how-to video. That's influence.

Amy Jo Martin, founder of Digital Royalty, develops social media strategies and customized education programs for brands like DoubleTree by Hilton and people like Shaquille O'Neal and Dwayne "The Rock" Johnson.

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